EUR/USD Daily Forecast – Test Of Support At 1.1330

Euro Declines Ahead Of The Weekend

EUR/USD is currently trying to settle below the support at 1.1330 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle below the support at 96 but failed to develop sufficient downside momentum and moved back above this level. In case the U.S. Dollar Index settles above 96, it will head towards the resistance level at 96.25 which will be bearish for EUR/USD.

Yesterday, ECB left the interest rate unchanged and stated that its pandemic emergency purchase programme would end in March 2022. ECB reiterated that inflation will be lower in 2022 and that markets should not expect rate hikes in the next year.

Today, foreign exchange market traders will focus on inflation data from EU. The final reading of Euro Area Inflation Rate report is expected to show that Inflation Rate increased by 0.5% month-over-month in November. On a year-over-year basis, Euro Area Inflation Rate is projected to grow by 4.9%. Euro Area Core Inflation Rate is expected to increase by 2.6% year-over-year. Final numbers are rarely different from preliminary figures, but any surprise will have an impact on EUR/USD dynamics.

Technical Analysis

EUR/USD faced resistance at 1.1350 and declined below the support level at 1.1330. In case EUR/USD settles below this level, it will get to the test of the support at the 20 EMA at 1.1315.

A move below the 20 EMA will push EUR/USD towards the support level at 1.1300. In case EUR/USD manages to settle below this level, it will head towards the support at 1.1270. A successful test of the support at 1.1270 will push EUR/USD towards the next support at 1.1230.

On the upside, a move back above 1.1330 will open the way to the test of the resistance at 1.1350. In case EUR/USD gets above 1.1350, it will head towards the next resistance level at 1.1370. A successful test of this level will push EUR/USD towards the resistance at the 50 EMA at 1.1400.

For a look at all of today’s economic events, check out our economic calendar.